The industry of the cigarette in the Dominican Republic presents a complex panorama, marked by the coexistence of important legal actors and a notable impact of trade illegal.
Currently, the market is dominated by three large companies: Philip Morris Dominicana, British American Tobacco and La Tabacalera, who operate in an environment that combines production local, imports and exports to Caribbean countries.
770Volume
Millions of units of legal cigarettes produced in the Dominican Republic at the end of 2023, 65% less than the 2.2 billion reported in 2012.
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Consumption
Millions of units of legal cigarettes consumed in the Dominican Republic as of September 2024, according to official data.
To the closing of 2023, the volume of cigarettes legal in the country reached 770 million units. This number represents a drastic decrease 65% compared to the 2.2 billion units reported in 2012.
This decline has been accompanied by a 31% drop in collections prosecutors coming from the tax selective to consumption, according to data from the Ministry of Finance. The data indicates that, until September 2024, around 500 million units of cigarettes legal.
They fall collections
The changes between the legal and illegal match the increments prosecutors implemented between 2013 and 2015, when the tax specific selective was raised by 40% due to Law 253-12.
During 2023, the sector cigarettes contributed 3,088 million pesos in selective consumption taxes. However, it is estimated that the Dominican State loses close to 1.7 billion pesos annually due to drug smuggling. cigarettes illegal.
Also, in 2024 the collections prosecutors in the sector registered a drop of 113.94 million pesos, which represents a decrease of 4.83% compared to the same period in 2023.
Regarding imports, the volume of finished products in the country amounts to 640 million units of cigarettes, while exports reach approximately 200 million units, distributed in 15 Caribbean countries.
According to the General Directorate of Customs (DGA), between January and September 2024, cigarette imports showed an increase in value of $592,620 compared to the same period in 2023, although the imported quantity decreased by 1,785,146 packs, for a reduction of 4.26%. By 2023, the value of imports had increased by $356,520.99, despite a reduction of 5,106,962 imported packs, equivalent to -8.07%.
Trade illicit
According to data from the Dominican Association of the Cigarette Industry (Asocigar), also, the incidence of trade illegal of cigarettes in the Dominican Republic it currently stands at 32.5%.
This percentage, although still significant, has shown a downward trend in recent yearsdecreasing from figures that exceeded 50% of the total market.
The reduction is attributed to efforts joint efforts between the private sector and the authorities, who have established strategic alliances to combat smuggling.
![[object HTMLTextAreaElement]](https://resources.diariolibre.com/images/2023/07/26/whatsapp-image-2023-07-26-at-125742-pm-96fba356.jpeg "Consumption of legal cigarettes decreases in the DR")
Andrés Espinal, director of corporate affairs at Philip Morris for the Dominican Republic and the Caribbean, highlighted that more than 80% of cigarettes legal consumed In the country they are manufactured locally.
The World Health Organization estimates that in the Dominican Republic there are nearly 690,000 smokers. Global Action to End Smoking, indicates that 6.7% of the total population of the Dominican Republic smokes cigarettes.
Within the Philip Morris portfolio, the Marlboro brand is positioned as the best-selling brand worldwide and belongs to the segment high priced. The local brand Nacional leads the segment mid-priced, while L&M is another prominent brand internationally.
Espinal pointed out that the sector has faced issues of trade illegal since 2013, after abrupt increases prosecutors introduced by Law 253-12 on Tax Reform, which has significantly increased the incidence of cigarettes illegal.
It is estimated that, in addition to the 770 million cigarettes legal consumed In 2023, approximately 240 million units correspond to the market illegalwhich brings total consumption in the country to more than 1,000 million cigarettes.
At a global level, the industry has observed a growing interest in alternatives to the cigarettes traditional, such as products free of smoke (For example, cigarettes electronics and heated tobacco), which, according to scientific studies, reduce exposure to toxic substances.
one of these productsIQOS, has been authorized by the United States Food and Drug Administration (FDAfor its acronym in English), and is considered beneficial for public health.
In the area of distributionthe industry of the cigarette in the Dominican Republic has a network that covers more than 60,000 points of sale in the country, ensuring that products They arrive both directly and through wholesalers. The legal portfolio includes nearly 13 brands and its various variants for consumers.
Closing of floors Philip Morris in Germany
Philip Morris announced its intention to close its two floors of production in Germany, located in Berlin and Dresden, due to the decrease of tobacco consumption in Europe. It is estimated that 372 employees would be affected by these closures: 98 in Berlin and 274 in Dresden.
The capital plant, dedicated to tobacco processingwill close during the first half of 2025, while the Dresden plant, which produces rolling tobacco, will close in mid-2025, according to data published by the AFP Agency.
Products free of smoke
A report from Philip Morris International indicates that the business of products free of smoke (SFB) has seen significant growth, with quarterly shipments of nearly 40 billion units to 92 markets.
This segment represented 38% of their income total net profits and 40% of gross profit, evidencing growth compared to the previous year.
IQOS, launched in the Dominican Republic in June 2018, has enabled more than 8,000 smokers adults switch to an option without smoke.
Philip Morris Dominicana directly employs more than 200 employees, who are part of an extensive value chain that encompasses more than 20,000 points of sale in the country and also have regional responsibilities in Central America and the Caribbean.
